Conflict Identified as Crypto.com Trading on its Own Platform

Former Coinbase Japan CEO Joins Fidelity-Backed VCWell-known investment firm Eight Roads Ventures has recruited the former CEO of Coinbase Japan to join them as a partner within the firm.Eight Roads Ventures, a prominent investment firm backed by Fidelity with assets worth over $11 billion, has announced the hiring of Nao Kitazawa as a venture partner. Kitazawa brings a wealth of expertise and experience garnered at Coinbase Japan and elsewhere in the digital assets industry to the firm.In a recent LinkedIn post, Kitazawa expressed his excitement about joining Eight Roads Ventures to pursue his passion for fintech and Web3. He acknowledged the firm’s successful track record of supporting innovative and disruptive companies and considered it an honor to be part of such an organization.Photo by Marten Bjork on UnsplashCoinbase exited JapanKitazawa’s tenure at Coinbase Japan came to an end earlier this year, coinciding with Coinbase’s decision to exit the Japanese market due to prevailing “market conditions.” His appointment at Eight Roads Ventures indicates the increasing interest and involvement of Fidelity, the firm’s backer, in the cryptocurrency space.Fidelity has been making significant strides in the crypto industry. EDX Markets, a crypto exchange backed by Fidelity, recently announced its launch despite regulatory challenges from the United States Securities and Exchange Commission (SEC) and a bearish market environment.TradFi heavyweight in cryptoFidelity is probably the standout heavyweight firm from traditional finance which has stepped foot in the crypto space from early on. It has done so through Fidelity Digital Assets, its crypto arm. The subsidiary company quietly rolled out its trading platform this year, providing millions of users with commission-free trading of bitcoin and ether. Additionally, Fidelity has been expanding its crypto research team, demonstrating its commitment to the industry.Headquartered in Bermuda, Eight Road Ventures positions itself as a global venture capital firm that helps entrepreneurs scale. It backs and partners with game-changing technology and healthcare companies, with a presence in China, Europe, India, and Japan.Eight Roads has also been actively investing in various crypto startups, including Fireblocks and Kaiko. Kitazawa’s appointment is expected to bring significant value to the firm’s portfolio, leveraging his knowledge and insights gained from working in the cryptocurrency sector.Originally known as Fidelity Ventures, Eight Roads Ventures has been involved in investments since 1969, initially operating out of Boston. Recently, it launched a $350 million technology investment fund in China and a $250 million healthcare and life sciences fund in India, demonstrating an interest in pursuing emerging opportunities in Asia.Shifting strategic focus overseasWith the addition of Nao Kitazawa as a venture partner, Eight Roads Ventures reinforces its position as a leading investment firm with a keen interest in the evolving landscape of fintech, Web3, and cryptocurrencies. It’s likely that the firm recognizes what way the regulatory winds are blowing, and with that, it’s bringing on board someone of Kitazawa’s caliber, with expertise outside of the US.Against the backdrop of a currently adverse regulatory environment in the US, earlier this month US VC giant Andreessen Horowitz (a16z) opened its first international office in London, in what many perceived to be a move towards a more regulatory progressive environment relative to the emerging digital assets sector.

Kiln, the Paris-based Ethereum staking platform, has successfully secured $17 million in a recent funding round, as revealed in a press release on Thursday. Round led by 1kxThe financing round was spearheaded by 1kx, with participation from Crypto.com, Wintermute Ventures, Thailand’s KXVC and Hong Kong’s LBank and IOSG. This infusion of capital brings Kiln's total funding to $35 million, marking a milestone in the company's growth trajectory. The latest funding follows a previous investment of $17.6 million in 2022 from Illuminate Financial, LeadBlock Partners, Sparkle Ventures, Alven and Blue Yard Capital, among others. Kiln opted not to disclose the valuation associated with the recent funding round. In 2021, Canadian blockchain infrastructure and staking firm Figment reached unicorn status with a $1.4 billion valuation. The Kiln platform has witnessed significant growth, increasing its staked assets under management to $4.2 billion in 2023. Acknowledging that growth on Jan. 4, Fred Lardieg, partner at Abu Dhabi sovereign fund Mubadala wrote:”This little-known French startup called @Kiln_finance has been killing it in the #Ethereum #Staking space, by relentlessly releasing new features throughout 2023. They're now the #1 operator of Ethereum validator nodes according to @ratedw3b.” The firm’s expansion is attributed to strategic integrations with various custody solutions, wallets and exchanges over the past year.Photo by DrawKit Illustrations on UnsplashRegional headquarters in SingaporeThe funds raised will be instrumental in facilitating Kiln's global expansion initiatives, including the establishment of its Asia-Pacific (APAC) headquarters in Singapore during the first quarter of the year. Additionally, the company aims to allocate resources for further product development to enhance its offerings in the decentralized finance (DeFi) space. Laszlo Szabo, CEO and co-founder of Kiln, articulated the company's mission, stating: "Our mission is to democratize value creation in the digital assets ecosystem, providing millions of users with easy access to rewards through our platform." The funds will support Kiln's commitment to making value creation in the digital assets space more accessible globally. The company plans to use the funding not only for expansion but also to introduce additional reward mechanisms in the rapidly evolving DeFi landscape. Regulatory uncertaintyWhile Ethereum staking offers users the opportunity to earn yields by validating transactions on the blockchain, the regulatory landscape remains uncertain. The U.S. Securities and Exchange Commission (SEC) has taken legal action against several exchanges involved in crypto staking, with SEC Chairman Gary Gensler expressing views on Ethereum-like tokens as potential securities. Despite regulatory challenges, Kiln's staking platform caters to institutional clients, allowing them to stake assets and offer white-label solutions to their customers. With a focus on proof-of-stake blockchains, Kiln holds a significant portion of staked assets on Ethereum, exceeding $3.1 billion, according to its Dune Analytics dashboard. 1kx Founding Partner Christopher Heymann emphasized the increasing role of financial institutions in the crypto space, stating:  "Financial institutions will become a dominant force in crypto, leveraging the immense market opportunity as they stake on behalf of their customers." By utilizing smart contracts, Kiln allows users to stake smaller amounts, overcoming the traditional barrier of a 32 ETH minimum requirement for native ether staking. This approach aligns with Kiln's goal of fostering inclusivity in the rapidly expanding world of decentralized finance.  

Banking giants in Turkey embrace crypto ahead of legislative changeIt remains unclear what the underlying environment for the further development of the crypto sector in Turkey will be until such time as the country introduces a legislative framework to shape the industry’s development. However, that fact is not deterring a couple of Turkey’s leading banks, who have decided to embrace the digital asset realm.Photo by Michael Jerrard on UnsplashStablex acquisitionOn Monday CoinDesk Turkiye reported that the investment arm of Turkish bank Akbank had acquired local crypto company Stablex. Stablex was founded in May 2020 by Jihad Shannak with the objective of providing professional services, including trading relative to cryptocurrencies in Turkey. Majority shareholding passed to Ak Investment in May of this year, with initial negotiations on the sale having commenced in August 2022.A high-ranking official at Ak Investment expressed the group’s ambition to become a pivotal figure in the digital asset realm, signaling a proactive approach to the evolving financial landscape. Akbank also banks the majority of crypto start-ups based in Turkey.Speaking about the acquisition recently, Akbank executive Mert Erdoğmuş stated:“We have invested in Stablex to respond to the need for reliable and innovative service in the cryptocurrency market. Stablex reflects our values with its experience in the sector, pioneering achievements and professional service approach.”BBVA crypto walletAlongside Akbank’s move into the digital assets arena, Garanti BBVA, Turkey’s second largest private bank, recently unveiled its crypto wallet app. The feature-rich application includes a cold wallet, empowering users to seamlessly send and receive assets such as bitcoin (BTC), USD Coin (USDC) and ether (ETH).The pilot project for the app commenced in August, with the application currently available on iOS. In bringing the app to market, the bank created Garanti BBVA Digital Assets, a dedicated subsidiary firm. Commenting on that development back in August, the subsidiary’s Chairman of the Board, M. Çağrı Süzer, stated:”Our research shows that customers significantly value trust in their crypto transactions and especially on its storage. Hence, we are happy to launch our Crypto Custody Wallet addressing these real needs.”Despite uncertainties, Turkey has firmly established itself in the global crypto landscape, ranking among the top 20 countries in Chainalysis’ Global Crypto Adoption Index 2023. The instability of the Turkish lira in recent years has been a driver for crypto adoption in the country. In recent days, the bitcoin unit price has reached its highest exchange rate level against the local sovereign currency.Earlier this week, it emerged that crypto platform Blockchain.com is adding headcount and has its sights set on expansion into Turkey as one of its growth opportunities.FATF-compliant regulatory approachTurkey’s regulatory stance has been to take a cautious approach. In 2021, the central bank restricted the use of crypto for payments, although a complete ban on digital assets was ruled out by officials.Looking ahead, a government official revealed plans for crypto legislation to be presented to Parliament in November. While details remain scarce, this legislative move aligns with Turkey’s broader strategy to exit the Financial Action Task Force’s (FATF) “gray list.”